300 - Accounting Procedures - General

AUDITS & INVESTIGATIONS BY EXTERNAL AGENCIES

BACKGROUND

External audits of University of California, San
Diego (UCSD) campus and health sciences functions are performed by Federal,
State, local government offices, and The Regents' audit firm. External audits
include financial and A-133 audits, pricing proposals, contract close-outs,
on-site monitoring, and system audits. Audit & Management Advisory Services
(AMAS) has been delegated responsibility for the oversight of external fiscal audit
activities at UCSD.

Because it is the largest provider
of Federal funds, the Department of Health and Human Services Office of
Inspector General is designated as the University's cognizant audit agency.
Other agencies which periodically review UCSD include:

California Bureau of State Audits

California State Controller’s Office

County of San Diego

Internal Revenue Service

California Student Aid Commission

Defense Contract Audit Agency (DCAA)

National Science Foundation (NSF)

Office of Naval Research (ONR)

External investigations may also be
performed by the agencies listed above, or others, if information is received
directly by the agency which alleges a violation of the terms and conditions of
contracts or grants.

This policy outlines the scope,
responsibilities and procedures that will be employed in coordinating and
managing external agency audit and investigation activities at UCSD, excluding
campus activity by the auditors for The Regents as outlined in BUS-76,
Engagements with The Regents' Audit Firm.

POLICY

It is the policy of UCSD to comply fully
with all financial, administrative and audit requirements that arise from its
role as a recipient of public and other extramural funds; and to cooperate
fully with external auditors or other agency officials conducting external
investigations. All outside audit activity will be properly authorized, and
effectively and consistently tracked and communicated. Further, required
responses will be coordinated and communicated to management and external
agencies.

EXTERNAL AUDITS

ARESPONSIBILITIES

1.It is the responsibility of the Assistant Vice Chancellor (AVC)-AMAS,
or a delegated representative, to act as liaison for external audit activities
at UCSD. This may include, but is not limited to, coordination and review of
client responses; assistance in resolving questions and issues; coordination of
interdepartmental meetings; tracking, documenting and reporting outside audit
activities to campus and University management; and follow-up on agreed to
corrective actions.

Specific
AMAS duties include:

a.Notifying
the cognizant department administrator(s), Principal Investigator(s), or other
designated campus or Health Sciences representatives, and the Office of Post
Award Financial Services, of the external audit.

b.Arranging
for appropriate workspace and facilities for the external auditors.

c.Arranging
a formal entrance conference for all appropriate Campus and Health Sciences
representatives to clarify the scope of the audit, expected audit procedures,
and necessary records and information, as determined necessary.

d.Attending
significant interim meetings concerning the status of the audit.

e.Resolving
questions and providing guidance to the cognizant department administration.

g.Arranging
an exit-conference at the close of fieldwork if feasible to discuss findings
and recommendations.

h.Distributing
copies of the draft audit report(s) to the cognizant department administration
or other designated campus and Health Science representative for written
management responses. Upon receipt of the management responses from the
cognizant departments, AMAS will review responses for consistency, compliance
with UCSD policy, and institutional perspective. AMAS will suggest and
coordinate changes with management as needed.

i.Distributing copies of the final audit report to the cognizant
departments.

j.Performing follow-up on significant external audit findings and
recommendations to ensure that the cognizant office implements corrective
action within agreed upon time frames.

k.Maintaining
complete and accurate files of the external audit activity handled by AMAS.

l.On an ongoing basis, identifying significant external audit concerns
from sources, such as the General Accounting Office and Health and Human
Services Inspector General reports, and communicating these concerns on a
proactive basis so that appropriate corrective action can be taken. This communication
is accomplished through CARE Committee meetings, External Audit Status Reports,
and Audit Topic Updates as determined necessary.

2.Responsibility for providing the requested information for
external audit reviews resides with the cognizant department administrator(s),
Principal Investigator(s), or other designated campus and Health Sciences
representatives.

Specific duties
include:

a.Notifying
AMAS if an external audit request is received.

b.Providing
that key personnel are available during the external audit to answer external
auditor inquiries and to provide supporting documentation.

c.Notifying
AMAS of significant issues that arise during the external audit.

e.Preparing
draft management responses and forwarding responses to AMAS no later than seven
working days before the due date. Responses should include target dates for
completing corrective actions.

f.Requesting
AMAS assistance during any phase of the external audit process as needed

BPROCEDURES

1.Notices

AMAS will serve as the entry point
for all external audit agencies. All notices of outside agency audits received
directly by UCSD personnel other than AMAS will be referred to AMAS.

2.Audit Visits

Department of Health and Human
Services and unannounced auditors and investigators from outside the University
will be requested to present their credentials to the Assistant Vice
Chancellor, AMAS or a delegated AMAS employee. Access to University records
will be withheld until authority has been verified.

3.Communication Process

AMAS will notify the cognizant
department administrator(s), Principal Investigator(s), or other designated
campus representatives that may be involved in the external audit and will
generally schedule an entrance meeting. AMAS will maintain periodic
communication with the external audit agency throughout the review.

AMAS will distribute copies of the
draft report and final report upon receipt from the external auditor. AMAS will
coordinate the management responses to the draft report and final report and
forward a response for the institution as a whole to the external auditor. Extensions,
if needed, will be coordinated with the external auditor.

To keep UCSD Campus and Health
Sciences personnel apprised of the external audit activities, AMAS will prepare
and distribute the following reports:

·New Starts and External Audit Status Reports - The
External Audit Status Report references external audits which are currently active
or which have been closed during the current fiscal year.

These periodic updates on external
audit activity will be provided to the UCSD Compliance Audit Risk and Ethics
(CARE) Committee.

Records

A working file of each audit will
be prepared by AMAS and maintained in the audit files subject to University
records retention guidelines.

EXTERNAL INVESTIGATIONS

ARESPONSIBILITIES

1.It is the responsibility of the Assistant Vice Chancellor - AMAS,
or a delegated representative, to act as liaison for external investigative
activities. This may include, but is not limited to, coordination and review of
client responses;

assistance in resolving questions
and issues; coordination of interdepartmental meetings; tracking, documenting
and reporting outside audit activities to campus and University management; and
follow-up on agreed to corrective actions. At all times during an external
agency investigation, AMAS’s responsibility is to act in the best interests of
the University as a whole.

Specific
AMAS duties include:

a.Notifying
the cognizant University administrator(s), Principal Investigator(s), or other
designated campus or Health Sciences representatives, and Extramural Funds of
the external investigation.

g.Distributing
copies of the draft investigation report, if any, to involved University
parties for written management responses. Upon receipt of the management
responses from the cognizant departments, AMAS will review responses for
consistency, compliance with UCSD policy, and institutional perspective. AMAS
will suggest and coordinate changes with management as needed.

h.Distributing
copies of the final investigation report, if received, to the cognizant
departments.

i. Performing follow-up on significant external investigation findings and
recommendations to ensure that the cognizant office implements corrective
action within agreed upon time frames.

j.Maintaining complete and accurate files of the external investigation
activity handled by AMAS.

m.On an ongoing
basis, identifying any recurring external investigation topics and
communicating to appropriate University management these concerns on a
proactive basis.

2.Responsibility for providing the requested information for
external investigative reviews resides with the cognizant department
administrator(s), Principal Investigator(s), or other designated Campus and
Health Sciences representatives.

Specific duties
include:

a.Notifying
AMAS if an external investigation request is received.

b.Providing
that key personnel are available during the external investigation to answer
external agency inquiries and to provide supporting documentation.

c.Notifying
AMAS of significant issues that arise during the external investigation.

e.Preparing
draft management responses and forwarding responses to AMAS for communication
to the external investigative agency.

f.Requesting
AMAS assistance during any phase of the external investigation process as
needed.

BPROCEDURES

Investigation protocols followed
by external agencies and related University actions and responses will differ
on a case-by-case basis. When investigations are conducted by external
agencies, the primary role of AMAS is to act in the best interest of the
institution as a whole. Principal Investigators should be advised to consult
with their Department Chair and/or Dean should circumstances arise for which
additional consultation from a faculty perspective is desired.

1.Notices

When possible, AMAS serves as the
entry point for all external investigative agencies. Occasionally, federal law
enforcement representatives may contact employees directly. All notices of external
agency investigations received directly by UCSD personnel other than AMAS should
be referred to AMAS.

2.Audit Visits

Any unannounced investigators from
outside the University will be requested to present their credentials to the Assistant
Vice Chancellor - AMAS or a delegated AMAS employee. Access to University
records will be withheld until authority has been verified.

3.Communication Process

AMAS will coordinate with
administrators as needed based on the agency concern, the information
requested, and the sensitivity of the investigation. This may include
officials from the Office of Research Affairs, the Office Post-Award Financial
Services, the Office of Contracts & Grants, the Human Research Protections
Program, Animal Welfare, Campus Counsel, and others, depending on the nature of
the review.

Every effort will be made to involve
the appropriate University officials, while at the same time maintaining individual
employee confidentiality to the extent possible within the limitations of law
and policy. Involved parties named in federal investigations should be
cautioned that their identity may become known for reasons outside of the
control of AMAS or University administrators.

AMAS may not be provided with
specific information from the investigating agency to be able to understand the
concern under review, and may not be provided with results of the investigative
review prior to or after the investigation has been completed. When necessary,
UCSD will request access to investigation results available under relevant
federal or state information access laws. In each circumstance, AMAS will
maintain full communication with University officials on the status of the
review to the extent possible.

If draft reports are provided for
University review, AMAS will coordinate the management responses among all
parties involved and forward a response for the institution as a whole to the
external investigative agency. AMAS will also coordinate any request for
extension with the external investigative agency.

4.Records

A working file of each external
investigation will be prepared by AMAS and maintained in the working paper
files subject to University records retention guidelines.